McDonald's Turnaround? Wall Street Thinks It's More Likely Now

Robert Baird and Deutsche Bank issued updates on McDonald's Corporation (NYSE: MCD) after the fast-food chain reported strong revenue and earnings that drove the stock higher.

Baird analyst David Tarantino rated McDonald's as Neutral and increased his price target from $115 to $122. Deutsche Bank analysts Karen Short and Brett Levy rated McDonald's as a Buy with a $135 price target.

Shares traded recently at $119.88, continuing their uptrend from Monday.

Baird

"With turnaround initiatives showing signs of gaining traction across a range of markets, we believe MCD is well positioned to drive healthy operating performance in 2016 through solid comps, modest unit growth, and margin expansion."

Related Link: Did The New All-Day Breakfast Help McDonald's Post Best Q4 In Four Years?

Analysts noted that McDonald's has an improving fundamental outlook, particularly with increasing demand for its all-day breakfast menu. This consumer demand gives McDonald's the potential to further drive revenues and support growing margins.

Deutsche Bank

"MCD has regained sales momentum, its operational focus and has improved its brand image while proving willing to challenge legacy thinking...Management clearly has the company positioned to retake its mantle as an industry leader in more than just scale terms."

Deutsche Bank commended McDonald's on several operational decisions including a higher closure stores rate, the decision to include an all-day breakfast menu, and improve working conditions. Going forward, McDonald's looks positioned to leverage its technological platform to improve customer service and drive sales revenue and margins.